The objective of this study is to review current measurement issues and valuation methods such as "human capital" and "friction cost" for estimating productivity loss due to illness. Since observed wages diverge from marginal productivity when allowances are made for sick days and workers are risk averse, or when a job type involves team production, unavailability of perfect substitutes, and/or time-sensitivity of output, productivity loss is likely to be underestimated. A multiplier adjusting… CONTINUE READING